Wells Fargo Class Action Alleges Employees Opened Fake Accounts

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Amid mass firings and millions in government penalties, Wells Fargo Bank now faces a consumer class action lawsuit seeking compensation for alleged fraudulent practices by thousands of its bankers.

Plaintiffs Lawrence J. Mitchell, Kay Mitchell and Matthew C. Bishop claim Wells Fargo violated a slew of federal and state consumer protection laws when its employees engaged in practices designed to inflate their sales figures at consumers’ expense.

The plaintiffs allege Wells Fargo bankers have been under excessive pressure from management to open more and more accounts per customer.

The class action claims these quotas are often impossible to reach because there simply are not enough customers coming in the door. Bankers must then resort to unscrupulous means to meet their quotas, the plaintiffs say.

In an attempt to meet these unrealistic sales goals, Wells Fargo bankers opened over 1.5 million bogus deposit accounts using information from actual consumers, according to the lawsuit.

These accounts may have been opened in customer’s names without their authorization, and they may have been funded using simulated funding or by transferring funds from customer accounts without their knowledge or consent, the plaintiffs claim.

Some of these unauthorized accounts accrued fees such as overdraft fees from linked legitimate accounts and fees for failure to maintain a minimum balance. An analysis attributed to Wells Fargo reportedly says that about 85,000 of these accounts generated around $2 million in fees.

Similarly, Wells Fargo bankers may have opened over 565,000 credit card accounts using consumer’s information without their knowledge or consent, according to the plaintiffs.

They say the bank’s own analysis determined some of these accounts incurred over $400,000 in fees like annual fees, overdraft protection, or finance and interest charges.

These unauthorized accounts allegedly remained open even after customers discovered them and asked Wells Fargo to close them. Some unauthorized accounts were purportedly referred to collections for having a negative balance.

Among other tactics attributed to these over-pressured employees, some are accused of issuing debit cards to customers who didn’t request them.

Bankers allegedly assigned PIN numbers to customer ATM card numbers, allowing the banker to enroll the customer in online banking or bill paying without their knowledge or consent.

Others allegedly misinformed customers that certain Wells Fargo products are available only in bundles with other products, driving those customers to buy products they did not want or need.

Wells Fargo has already fired over 5,300 employees accused of being involved in the sales-inflating practices at issue.

The company simultaneously faces a pile of civil penalties totaling $185 million from the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency and the City of Los Angeles.

In the current Wells Fargo class action lawsuit, the plaintiffs say that despite the mass firing and administrative penalties, the banking giant has made no significant changes that would prevent the alleged practices.

Plaintiffs seek to represent a Class consisting of all persons who were financially harmed by the practices complained of. The Class would specifically include all Wells Fargo customers who used any of the bank’s financial services within four years prior to the filing of the Wells Fargo class action lawsuit, as well as customers from any period whose identifying information was stored in Wells Fargo’s database.

They seek an injunction forbidding Wells Fargo from continuing the practices at issue. They also seek an award of damages, restitution and disgorgement of revenues wrongfully gained, court costs and attorneys’ fees.

The plaintiffs’ attorneys are Steven A. Christensen and Zane L. Christensen of Christensen Young & Associates PLLC.

The Wells Fargo Banking Fraud Class Action Lawsuit is Mitchell, et al. v. Wells Fargo Bank NA, et al., Case No. 2:16-cv-00966, in the U.S. District Court for the District of Utah.

UPDATE: On Nov. 29, 2017, Wells Fargo lost its motion attempting to compel arbitration in a class action lawsuit alleging bank employees opened accounts without customer permission.